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Conagra Brands Reports Fourth Quarter and Full Year Fiscal 2024 Results
Chicago, July 11, 2024 – Conagra Brands, Inc. (NYSE: CAG) has announced its fourth quarter and full year results for fiscal year 2024, which ended on May 26, 2024. The results reveal significant financial performance metrics and the company's strategic direction for fiscal 2025.
Fourth Quarter Highlights:
- Net Sales: Reported net sales decreased by 2.3%, while organic net sales dropped by 2.4%.
- Operating Margin: Reported operating margin was negative at (19.1)%, whereas adjusted operating margin stood at 14.8%.
- Earnings: Reported diluted loss per share was $1.18 due to non-cash goodwill and brand impairment charges. Adjusted earnings per share (EPS) was $0.61.
Full Year Fiscal 2024 Highlights:
- Net Sales: Reported net sales decreased by 1.8%, and organic net sales fell by 2.1%.
- Operating Margin: Reported operating margin decreased by 168 basis points to 7.1%, while adjusted operating margin increased by 34 basis points to 16.0%.
- Earnings: Reported diluted EPS decreased by 49.3% to $0.72, and adjusted EPS decreased by 3.6% to $2.67.
Fiscal 2025 Guidance:
Conagra Brands projects:
- Organic Net Sales: Expected to range from a 1.5% decrease to flat compared to fiscal 2024.
- Adjusted Operating Margin: Anticipated between 15.6% and 15.8%.
- Adjusted EPS: Forecasted between $2.60 and $2.65.
- Free Cash Flow Conversion: Approximately 90%.
The Board of Directors has approved the continuation of an annualized dividend rate of $1.40 per share.
CEO's Perspective:
Sean Connolly, CEO of Conagra Brands, stated, "Our brand investments yielded results, particularly in our Domestic Retail business. We saw notable progress in our Frozen and Snacks categories with market share gains. Our supply chain productivity initiatives expanded adjusted gross margins, and we strengthened our balance sheet by reducing net leverage."
Segment Performance:
Grocery & Snacks:
- Net Sales: Decreased by 2.1% to $1.2 billion.
- Operating Profit: Increased by 12.6% to $175 million, with adjusted operating profit up by 8.9% to $255 million.
Refrigerated & Frozen:
- Net Sales: Decreased by 3.8% to $1.2 billion.
- Operating Loss: Reported a loss of $713 million due to goodwill and brand impairment charges. Adjusted operating profit decreased by 13.1% to $190 million.
International:
- Net Sales: Increased by 6.4% to $267 million.
- Operating Profit: Increased by 26.7% to $26 million, though adjusted operating profit decreased by 15.6% to $29 million.
Foodservice:
- Net Sales: Decreased by 3.9% to $291 million.
- Operating Profit: Increased by 25.9% to $40 million, with adjusted operating profit up by 39.9%.
Financial and Operational Updates:
- SG&A Expenses: Increased by 87.4% to $1.4 billion in the fourth quarter, primarily due to goodwill and brand impairment charges.
- Cash Flow: Generated $2.0 billion in net cash flows from operating activities for the full fiscal year, a significant increase from $995 million in the prior year.
- Debt: Ended the year with net debt of $8.4 billion, reflecting an 8.5% reduction.
Dividend Announcement:
The company will pay a quarterly dividend of $0.35 per share on August 29, 2024, to shareholders of record as of August 1, 2024.
Outlook for Fiscal 2025:
- Capital Expenditures: Estimated at approximately $500 million.
- Interest Expense: Expected to be around $415 million.
- Adjusted Effective Tax Rate: Approximately 23.5%.
- Joint Venture Contribution: Anticipated to be about $150 million.
Conagra Brands remains committed to navigating industry challenges, investing in its brands, and enhancing shareholder value through strategic initiatives and prudent financial management.
Source: CAG
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